Daily Archives: Oct 29, 2012

Acquiring a small bank in Brazil may seem like a rather brave thing to do right now. Over the past two years, seven small or mid-sized lenders have either been closed down or changed ownership as a result of financial difficulties. Several of those cases have allegedly involved fraud.

However, if you’re a big foreign bank looking to get into Brazil and you’re savvy enough to know which bank to choose, an acquisition in the sector could be a very smart move. Not only are shareholders now willing to sell for a low price, but it can also be one of the simplest ways to get a banking licence in the country.

Argentine bonds had a bad enough day last Friday, when a US appeals court dealt it a setback in its fight not to pay “holdouts” – the owners of debt on which it defaulted in 2001 who did not accept restructuring offers in 2005 and 2010.

Monday was worse – JP Morgan, Bank of America and Barclays cut their recommendations on Argentine debt, extending Friday’s sell-off into the worst two-day rout since 2008. Read more

New United Arab Emirates central bank rules aimed at cutting lenders’ heavy exposure to state institutions have come into force – but the scale and size of the problem mean it could take years to resolve, write Simeon Kerr and Camilla Hall.

While the directive aims to protect the financial system by reducing local banks’ loans to governments and state-related entities, the latest results from some big banks suggest these credit lines are continuing to expand. Read more

Whether you call it resource nationalism or getting a fair share of your natural resources, when countries introduce local ownership regulations it can hit foreign investors hard.

The latest case is Base Resources, a small-cap listed in Australia, with a flagship project in Kenya – Kwale Mineral Sands. Kenya’s mining ministry wants a local equity stake of 35 per cent of all mining licences. The market reaction? Base shares fell 36 per cent on Monday. Read more

It is still too early to say whether Yanukovich’s Party of Regions will be able to build a working majority, and at what political cost. But the election looks unlikely to make it any easier for Yanukovich to tackle his country’s pressing economic problems. Read more

It’s too early to call the result of Ukraine’s parliamentary election on Sunday but if exit polls are any guide the country is set for a delicate balancing act between government and opposition in parliament and, on the world stage, between the west and Russia.

As Western donors prepare to pull out of Aceh, nearly eight years after the Indian Ocean earthquake and tsunami that killed 170,000 people in the province, the ultimate challenge is whether it can fend for itself. In the provincial capital of Banda Aceh, the signs are encouraging.

New Japanese cars fill the reconstructed streets, teenagers pack out the coffee shops in the city centre and shoppers buzz around the city’s first shopping mall – the symbol of arrival for every up-and-coming Indonesian mid-tier city. Read more

Credit rating agency Moody’s on Monday raised the Philippines’ debt rating to just a notch below investment grade, boosting expectations that the country, one of the world’s few investment bright spots, may finally win an investment grade rating next year.

The Moody’s upgrade aligns its rating with those of Standard & Poor’s and Fitch. Read more

Monday’s picks from the BB team: the African National Congress must renew itself; China’s political transition could lead it down a path to openness; and Brazil’s autos decelerate. Plus: China’s territorial disputes; and blackmail in the Indian media.Read more

Weak corporate earnings are making Korean investors nervous. South Korea’s benchmark Kospi index has fallen back below 1,900 points, near its level before the US Federal Reserve unveiled its third round of quantitative easing, as South Korean companies feel the pinch of Europe’s protracted debt crisis and the global economic slowdown. Read more

The risk-reward dynamic is changing for companies pursuing investment opportunities overseas. And, as a result, CFOs face a quandary.

In 2011, red tape and bureaucracy topped the list of CFOs’ concerns when investing abroad. But in 2012 the focus is set firmly on the threats presented by currency fluctuations and geopolitical risk. CFOs are telling us that they face greater risk for the same reward. Read more

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